Rouble hits 1-month high versus euro as Russian markets recover
© Reuters. FILE PHOTO: Deputy Governor of the Bank of Russia Sergey Belov holds the newly designed Russian 100-rouble banknote during a presentation in Moscow, Russia June 30, 2022. REUTERS/Evgenia Novozhenina
LONDON (Reuters) – The Russian rouble strengthened to a one-month high against the euro on Thursday and firmed past 60 to the dollar as Russian markets recovered ground lost after the Kremlin ordered a partial military mobilisation.
Russian stock markets have experienced high volatility in the previous two sessions, slumping as President Vladimir Putin said he had signed a decree on a partial military mobilisation, significantly escalating what Russia calls its “special military operation” in Ukraine.
He also warned Moscow would respond with the might of all its vast arsenal if the West continued with what he called its “nuclear blackmail”.
By 1029 GMT, the rouble, which briefly sunk to its lowest since early July in the previous session, was 1.5% stronger against the dollar at 59.80 and had gained 2.3% to trade at 58.78 versus the euro, crossing the 59 threshold for the first time since Aug. 19.
It had firmed 1.6% against the yuan to 8.439.
Stocks extended their recovery, with Russia’s benchmark MOEX index rebounding further from its lowest mark since Feb. 24, the day Russia sent troops into Ukraine, hit on Wednesday.
Veles Capital said in a note that there may be some corrective buying though geopolitics and a hawkish U.S. Federal Reserve stoking global economic slowdown fears still hung over the market.
The dollar-denominated RTS index was up 3.7% to 1,147.6 points. The rouble-based MOEX Russian index was 2.3% higher at 2,178.8 points.
Among the market drivers are expectations that Gazprom (MCX:) will pay interim dividends. Deputy Finance Minister Alexei Moiseev told a banking forum in Kazan that he expected the Russian energy giant to deliver on its promise to pay.
Gazprom shares were up 4.9%, outperforming the wider market.
Gazprom dividends are a sensitive issue for the market, which was disappointed by a decision in June by the Russian government – Gazprom’s main shareholder – not to pay dividends on last year’s results.
“Gazprom’s shareholder meeting is now the main near-term driver for shares and the market as a whole,” said BCS Express.
Read More: Rouble hits 1-month high versus euro as Russian markets recover